Goodbye Laches Defense In Patent Cases

On March 21, 2017, the Supreme Court issued its decision in SCA Hygiene Products v. First Quality Baby Products (decision available here). In SCA, the patent owner accused the defendant of infringement in 2003. The defendant responded, claiming that the defendant’s own patent invalidated the patent owner’s patent. The patent owner then (in 2004), without notifying the defendant, placed its own patent into reexamination to determine whether the patent was valid in light of the defendant’s patent. In 2007, the PTO issued a certificate confirming the validity of the patent owner’s patent. In 2010, the patent owner filed suit against the defendant (seven years after it had first accused the defendant of infringement). The defendant moved for summary judgment based on laches (i.e., an unreasonable, prejudicial delay in commencing suit), which the district court granted (and the federal circuit upheld).

The Supreme Court reversed, holding that laches cannot defeat a damages claim brought within the period prescribed by the Patent Act’s statute of limitations. Accordingly, under current law, the patent owner can generally seek up to six years’ worth of damages.

Importantly, the Supreme Court did not address whether laches could serve as a defense to a claim seeking equitable relief. The Supreme Court also suggested that equitable estoppel “provides protection against some of the problems that [defendant] highlights, namely, unscrupulous patentees inducing potential targets of infringement suits to invest in the production of arguably infringing products.”